Ross Land has a loan of​ $8,500 compounded quarterly for three years at 6​%. What is the effective interest rate for the​ loan?

Ratios, rates, proportions
asked 2020-11-10
Ross Land has a loan of​ $8,500 compounded quarterly for three years at 6​%. What is the effective interest rate for the​ loan?

Answers (1)

Interest is compounded quarterly for 3 years, which is a total of 12 times. Therefore the answer is \(\displaystyle{8500}\cdot{\left({1.06}^{{t}}\cdot{2}\right)}={17103.67}\)

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